According to a newly-posted shareholder document, Apple now requires executive officers to own three times their annual salary. The CEO is still required to hold ten times his own annual salary in stock, as well.
This current move, as reported by the Wall Street Journal, comes a month after Apple’s board actually opposed a similar measure proposed by a shareholder.
Implemented February 6, the new decision comes as Apple continues to face some pressure from shareholders about the sliding stock price, as well as requests from folks like David Einhorn to start offering preferred stock options.
Apple is just one of many US companies trying to get its executive officers to act like owners rather than employees. If your stock options tank because of decisions you are making in a company like Apple, you’ll certainly act a bit more responsibly toward your employer. Or so goes the logic.
Apple’s new policy gives executives up to five years to satisfy the requirement of owning three times their annual base salary in stock. Non-employee directors, like board members, must hold five times their annual retainers in stock, too. Board members typically get retainers of $50,000 per year, and some committee chairs earn even more.
From the shareholder document:
The Chief Executive Officer (“CEO”) of Apple Inc. (the “Company”), the Company’s named executive
officers (“Executive Officers”), and any member of the Company’s Board of Directors who is not
employed by the Company (a “Non-Employee Director”), should own shares of Company common stock
that have a fair market value equal to the following multiple of the individual’s base salary (or, in the
case of a Non-Employee Director, the cash annual retainer paid to the Non-Employee Director by the
CEO 10 x annual base salary
Executive Officers 3 x annual base salary
Non-Employee Directors 5 x annual retainer